PROFILE OF THE SOUTH AFRICAN PEAR MARKET VALUE CHAIN
2015
Directorate Marketing
Private Bag X 15
Arcadia
0007
Tel: 012 319 8455
Fax: 012 319 8131
E-mail:[email protected]
www.daff.gov.za
TABLE OF CONTENTS
1. DESCRIPTION OF THE PEAR INDUSTRY .............................................................................................. 4
1.1 Pear production areas ............................................................................................................ 5
1.2 Pear production ..................................................................................................................... 5
1.3 Pear cultivars ......................................................................................................................... 6
1.4 Employment .......................................................................................................................... 7
2. MARKET STRUCTURE ............................................................................................................................ 8
2.1 Domestic markets and prices of pears .................................................................................. 9
2.2 Pear exports ......................................................................................................................... 10
2.3 Provincial and district export values of South African pears ............................................. 13
2.4 Share Analysis .................................................................................................................... 21
2.5 Imports ................................................................................................................................ 25
2.6 Processing ........................................................................................................................... 26
3. GROWTH, VOLATILITY AND STABILITY ANALYSIS .......................................................................... 26
4. MARKET INTELIGENCE ........................................................................................................................ 27
4.1 Competitiveness of South African pear exports ................................................................. 27
4.2 South Africa vs. Southern hemisphere production ............................................................. 32
5. MARKET ACCESS ................................................................................................................................. 32
5.1 Tariffs, quotas and the price entry system .......................................................................... 33
5.2 European Union (EU) ......................................................................................................... 35
5.2.1 Tariff barriers ............................................................................................................... 36
5.2.2 Non tariff barriers ........................................................................................................ 36
5.2.2.1 Legal requirements................................................................................................ 36
5.2.2.2 Non-legal requirements ......................................................................................... 37
5.2.2.3 Consumer health and safety requirements ............................................................ 38
5.3 United States of America (USA) ........................................................................................ 38
5.3.1 Tariff barriers ............................................................................................................... 38
5.3.2 Non tariff barriers ........................................................................................................ 38
6. DISTRIBUTION CHANNELS .................................................................................................................. 39
7. LOGISTICS ............................................................................................................................................. 40
7.1 Mode of transport ................................................................................................................ 40
7.2 Cold chain management ...................................................................................................... 40
7.3 Packaging ............................................................................................................................ 40
8. ORGANIZATIONAL ANALYSIS ............................................................................................................. 41
8.1 Producer and associated organizations ............................................................................... 41
8.2 Strengths, Weaknesses, Opportunities and Threat analysis ................................................ 43
8.3 Strategic challenges ............................................................................................................ 44
8.3.1 Labour markets ............................................................................................................ 44
8.3.2 Infrastructure ................................................................................................................ 44
8.3.3 Other challenges........................................................................................................... 44
8.4 Empowerment issues and transformation in the sector....................................................... 45
9. PEAR SUPPLY VALUE CHAIN .............................................................................................................. 45
9.1 Suppliers of inputs and farming requisites.......................................................................... 46
9.2 Producers............................................................................................................................. 46
9.3 Fresh produce markets ........................................................................................................ 46
9.4 Retailers .............................................................................................................................. 46
2
9.5 Processors ........................................................................................................................... 46
9.6 Cold storage operators and transporters .............................................................................. 46
9.7 Exporters ............................................................................................................................. 47
9.8 PPECB ................................................................................................................................ 47
9.9 Terminal and port operators ................................................................................................ 48
10. ACKNOWLEDGEMENTS ..................................................................................................................... 50
3
1. DESCRIPTION OF THE PEAR INDUSTRY
Pears are one of the most important deciduous fruits grown in South Africa, taking into consideration their
foreign exchange earnings, employment creation and linkages with support institutions. During the 2013/14
season, pears contributed approximately 25% (R2.5 billion) of the total gross value for deciduous fruits (
R10 billion) in South Africa. Per capita consumption of deciduous and subtropical fruit in South Africa
during 2014 was 24.45 kilograms per year. This represented 41.2 percentage change from the 2013 figure
of 24.74 kilograms per year.
The South African pear industry is export oriented with approximately half of pears being absorbed by the
export market. The industry operates in a deregulated environment where prices are determined by the
market forces of demand and supply. The total value of production for pears for the seasons 2004/2005 to
2013/14 is shown in Figure 1.
Figure 1: Total value of production for pears, 2004/05 - 2013/4
4000000
3500000
Value in Tousands
3000000
2500000
2000000
1500000
1000000
500000
0
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Years
Source: Statistics and Economic Analysis, DAFF
The total value of production for the industry has been on a steady increase since 2006/07 production
season. This is happening at the same time when production of pears has been relatively stable. Given
this, an increase in the total value of production can only be explained by amongst other things significant
increases in the demand for pears in the markets. Total value of production of pears increased by 72%
between 2012/13 and 2013/14. It is interesting to note that the total value of production increased at the
same time when the volume of production increased. During the ten years under review, the total value of
production increased from R726 million in 2004/05 to R3 billion in 2013/14. This represents an increase of
387% in ten years.
4
1.1 Pear production areas
South Africa‟s main pear producing areas are Ceres, Groenland, Wolseley/Tulbagh (all in the Western
Cape) and Langkloof East in the Eastern Cape. The Western Cape Province account for more than half of
all the pears produced in South Africa. The major pear production areas in 2014 are shown in Figure 2.
Figure 2: Pear production areas, 2014
Somerset Southern
Cape
West
1%
1%
Other
Paarl
1%
Stellenbosch 1%
1%
Langkloof West
1%
Piketberg
2%
Groenland
12%
Klein Karoo
7%
Wolseley/Tulbagh
12%
Villiersdorp
9%
Ceres
38%
Langkloof East
14%
Source: Hortgro Tree Census, 2014
Figure 2 above shows that in terms of the area planted to pears in hectares, Ceres accounted for 38% with
4 600 ha. Ceres was followed by Langkloof East at 14% (1 756 ha) and 12% (1 469 ha).
Wolseley/Tulbagh and Groenland accounted for 12% with 1 459ha and 1 451ha respectively. Total
production area for pears in 2014 was 12 184 hectares. This represents a 1.2% increase in production area
from the 2013 production year. The most increase in production area happened in the Wolseley/Tulbagh
area where the area under pear cultivation increased from 1 355 ha in 2013 to 1 459 ha in 2014.
1.2 Pear production
In 2014 the pear orchard age distribution was as follows:
5





1 018 ha (8%) was in the category of 0 – 3 years;
2 204 ha (18%) was in the 4 – 10 years category;
1 383 ha (11%) was in the 11 – 15 years category;
4 082 ha (33%) was in the 16 – 25 years category; and
3 524 ha (29%) were older than 25 years.
It is important to note the over half (62%) of South Africa‟s pear orchards are over 15 years old. Figure 3
illustrates total South African production of pears for the years 2004/05 to 20013/14. Generally, the
production of pears in South Africa has been fairly unstable between 2009/10 and 2013/14 production
season. A total of 411 991 tons of pears were produced in South African during the 2013/14 production
season. Production increased by about 8.5 percent between 2012/13 and 2013/14 production seasons.
During the ten years under review, production reached its peak at 411 991 tons in 2013/14 and was at its
lowest at 315 244 tons in 2004/05.
Figure 3: Total production of pears, 2004/05 - 2013/14
450 000
400 000
Volume in Tons
350 000
300 000
250 000
200 000
150 000
100 000
50 000
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/132 2013/14
Years
Source: Statistics and Economic Analysis, DAFF
1.3 Pear cultivars
South Africa‟s main pear cultivars are Packham‟s Triumph, Williams Bon Chretien, Forelle and Abate Fetel.
Figure 4 shows that in 2014, Packham‟s Triumph accounted for 38% (3 980 ha) of the total area planted
(12 221ha). It was followed by Forelle at 26% (3 193 ha), Williams Bon Chretien at 22% (2 675 ha) and
Abate Fetel at 6% (748 ha).
6
Figure 4: Leading pears cultivars planted in 2014
Doyenne Du Comice Flamigo
Other
1% Cheeky 1%
2%
2%
Beurre Bosc
2%
Abate Fetel
6%
Rosemarie
4%
Golden Russet Bosc
1%
Packham's Triumph
33%
Forelle
26%
Williams Bon Chretien
22%
Source: Hortgro Tree Census, 2014
1.4 Employment
The industry makes an important contribution to direct employment in the pear production and processing.
It provides indirect employment for numerous support industries in the areas where pears are grown. In
2014, direct employment within the industry was estimated at 12 822 people with 51 287 dependents. This
represents a 16 percent decrease in the number of people employed in the pear industry between 2013
and 2014.
The prescribed minimum wage is used as a baseline for determining basic wages in accordance with the
legislation governing conditions of service. Minimum wages for farm workers for the period 1 March 2014 to
1 February 2017 are presented in Table 1. The consumer price index (CPI) is used in the calculation of
annual wage adjustments. The sectoral determination stipulates that the wage increase will be determined
by utilizing the previous year‟s minimum wage plus CPI + 1.5%.
Table 1: Minimum wages for farm workers in the Republic of South Africa, 2016 - 2019
Minimum rate for the Minimum rate for the
Minimum rate for the period
period
period
1 March 2017 to 28
1 March 2018 to 28
1 March 2016 to 28 February 2017
February 2018
February 2019
Monthly
Weekly
Daily
Hourly
Mont Week Hour Mont Week Hour
7
R2778.83
R641.32
R128.261
R14.25
hly
ly
ly
Previous year‟s
minimum wage + CPI1
+ 1.5%
hly
ly
ly
Previous year‟s
minimum wage + CPI
+ 1.5%
Source: Department of Labour, 2015
2. MARKET STRUCTURE
The distribution of pears across the various markets for the period 2004/05 to 2013/14 is presented in
Figure 5. As illustrated in the figure, pear production in South Africa is primarily aimed at mainly exports
and processing markets and to a lesser extent local markets. Dried fruit production is relatively insignificant.
A total of 202 038 tons of pears were exported in 2014 while a total of 149 618 tons of pears were
absorbed by the processing industry during the same year. Between 2012/13 and 2013/14 marketing
seasons, the proportion of pears increased for the export markets increased by 2% while the proportion of
pears destined for the processing market also increased by 12%. The increase in the volumes exported
and processed follow the 8.5% increase in production volumes between 2012/13 and 2013/14. It would be
interesting to see whether this had any significant impact on prices of pears in the above-mentioned
markets (or vice-versa), an issue that is looked at in the following subsections.
Figure 5: Pear crop distribution, 2004/05 - 2013/14
250000
Volume in Tons
200000
150000
100000
50000
0
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Years
Local
Exports
Dried
Processed
Source: Statistics and Economic Analysis, DAFF
The CPI to be utilised is the available CPI for the lowest quintile as released by Statistics South Africa six weeks prior to the
increment date.
1
8
2.1 Domestic markets and prices of pears
Local pear market volumes and general price trends from 2004/05 to 2013/14 are presented in Figures 6
and 7.
60 000
6 000.00
50 000
5 000.00
40 000
4 000.00
30 000
3 000.00
20 000
2 000.00
10 000
1 000.00
Average prices (Rand/Ton)
Volume in Tons
Figure 6: Local pears sales, 2004/05 - 2013/04
0.00
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Years
Volume in Tons
Average price in Rand/Ton
Source: Statistics and Economic Analysis, DAFF
As illustrated in Figure 6, volumes of pears at local market during the past ten years have been relatively
stable, remaining above 40 thousand tons. A total of 41 698 tons of pears were sold through the local
markets in the 2013/14 marketing season. This was 2% lower than the volume sold through the same
channel during the previous year. Prices realised in the local markets increased from R2 469/ton in 2004/05
to R5 567/ton in 2013/14. The lack of serious growth in the local market in terms of volume during the past
decade may be due to a lack of coordinated marketing. Growth in the sector has been absorbed by the
increased exports to the traditional markets, resulting in significant increases in the average prices at the
local markets during the period between 2004/05 and 2013/14. Figure 7 illustrates price trends for pears for
the period 2004/05 to 2013/14.
9
Figure 7: Pear price trends 2004/05 - 2013/14
12000
Average prices(Rand/Ton)
10000
8000
6000
4000
2000
0
2004/05
2005/06
2006/07
Export Net Realisation
2007/08
2008/09 2009/10
Years
Local market average price
2010/11
2011/12
2012/13
2013/14
Processed average price
Source: Statistics and Economic Analysis, DAFF
As can be seen in Figure 7 pears generally fetch higher prices in export markets. Prices at both export and
local markets have generally been on the increase during the period under review. Given the fact that
during the period under review volumes destined for the export markets have been increasing while those
destined for the processing and local markets have been relatively stagnant, it can therefore be argued that
pear prices in the processing and local markets are strongly determined by prices in the export markets
(production during the period under review has been fairly stable). Between 2012/13 and 2013/14 prices
received in the export markets increased by 12% while those received in the local and processing markets
also increased by 4% and 4.5% respectively.
2.2 Pear exports
South African exports of pears for the period 2005 to 2014 are presented in Figure 8. South Africa is a
relatively small pear grower in terms of global hectares. However, the country is a major volume exporter in
global terms. Pears sold in the export markets generate a greater unit price than that achieved on the local
market. Therefore, a thorough understanding of the rules of the export markets is necessary for success in
international pear marketing.
10
250000
12000.00
200000
10000.00
8000.00
150000
6000.00
100000
4000.00
50000
2000.00
0
Net realisation (Rand/Ton)
Volume in Tons
Figure 8: South African pear exports, 2005 -2014
0.00
2005
2006
2007
2008
2009
2010
Years
Volume in Tons
2011
2012
2013
2014
Net Realisation in Rand/Ton
Source: Quantec Easydata
As illustrated in Figure 8 pear exports have experienced significant growth during the last decade,
increasing from 143 209 tons in 2005 to 207 282 tons in 2014. The volume exported declined by 3%
between 2013 and 2014. The net realisation has also been increasing indicating that the growth in volumes
exported has also been accompanied by growth in export earnings. The net export realisation increased
from R3 848/ton in 2005 to R9 960/ton in 2014. Figure 9 below illustrates the South African exports of
pears to the various regions of the world over the past decade.
Figure 9: Volumes of pears exported to various regions, 2005 2014
Volume in Tons
250000
200000
150000
100000
50000
0
2005
World
143209
Africa
4685
Americas 4086
Asia
16307
Europe
118062
2006
118734
6168
3468
16523
92506
2007
179736
4925
3864
22881
147811
2008
165997
4913
4130
21739
135037
2009
180613
4284
4122
22555
149567
2010
190361
11554
4852
35162
138746
Years
Source: Quantec Easydata
11
2011
198081
24304
5332
41272
126946
2012
189606
17983
6706
49190
115480
2013
206433
13602
5403
46064
141349
2014
207282
15516
4968
61295
125497
It is evident from Figure 9 that during the past decade, most of South Africa‟s exports of pears were
destined to the European and Asian markets to a lesser extent. In 2014 exports to Europe accounted for
61% of total South African pear exports. This is a clear indication that Europe is a major market for South
African pears. Following Europe is Asia. The continent contributed 30% to total South African pear exports
in 2014. Cumulatively the two continents absorbed 91% of all South African exports of pears during 2014.
Between 2013 and 2014 exports to Europe went down by 11%. The volumes to Asia increased by 33%
during the same period. Africa absorbed 15 516 tons (7%) of South Africa‟s pear exports in 2014 while the
Americas absorbed 4 968 tons (2%) during the same period. Given the fact that Europe constitutes a
significant share of South Africa‟s market for pear exports, Figure 10 below shows how the exports are
distributed within the different regions of the European continent.
Within Europe, the European Union is the major destination of South African pears (see Figure 10). The
economic block accounted for almost all (87%) of pears exported to Europe in 2014. The European Union
is followed by Eastern Europe which accounted for 12% of the total South African exports of pears to the
European continent in 2014. South African exports of pears to the European Union decreased by 12%
between 2013 and 2014, while those to Eastern Europe also declined by 0.2% during the same period.
Volume in Tons
Figure 10: Volumes of pears exported to Europe, 2005 -2015
160000
140000
120000
100000
80000
60000
40000
20000
0
Europe
Eastern Europe
Northern Europe
Southern Europe
Western Europe
European Union
2005
118062
4377
0
88
2380
111216
2006
92506
8075
21
0
2243
82168
2007
2008
2009
2010
2011
2012
2013
2014
147811 135037 149567 138746 126946 115480 141349 125497
14464 20870 15195 16771 13270 16249 15575 15613
91
956
1130
1050
939
619
1275
495
349
301
541
1487
1597
1811
676
536
1055
706
1400
64
536
16
44
0
131853 112204 131300 119372 110604 96785 123779 108853
Years
Source: Quantec Easydata
Given the importance of the European Union to the South African exports of pears (see Figure 10 above),
the economic block is further broken down into its member states in Figure 11 in order that the contribution
of the different member states can be isolated. Only those member states whose imports of pears from
South Africa exceeded 1 000 tons in a particular year during the last decade are shown in Figure 11. This
criteria produces 10 member states for the period under review (see Figure 11).
12
It can be seen from Figure 11 that within the European Union the Netherlands and the United Kingdom are
the major destinations of South African pears. In 2014, the two countries respectively accounted for 51%
and 16% to total South African exports of pears to the European Union. Other important destinations
include Belgium, Germany, Italy and France. Pear exports to the Netherlands declined in 2014 while those
to the United Kingdom also continued to fall.
Figure 11: Volumes of pears exported by European Union member
states, 2005 - 2014
70000
Volume in Tons
60000
50000
40000
30000
20000
10000
0
2005
Belgium
23782
Germany
8306
Spain
634
France
8507
United Kingdom 29984
Greece
1039
Ireland
1139
Italy
3417
Netherlands
31310
Portugal
1977
2006
14677
7598
204
4374
24125
762
1445
2725
23953
1252
2007
18248
13278
757
8352
33427
1222
2803
4318
43270
4320
2008
8715
12038
966
4813
24695
1496
3396
4613
44489
4536
2009
12524
15005
1317
7129
29728
1444
2828
5166
49784
4572
2010
4071
11474
2015
7461
25253
1312
1866
5536
55679
3091
2011
1578
9882
1298
5979
20075
1048
1647
4670
59718
3236
2012
860
7770
701
6585
17827
517
1861
5241
50590
3901
2013
294
10794
1954
8705
20279
943
2320
7055
64746
5395
2014
82
10433
1747
7634
17541
1312
1077
8293
55079
4409
Years
Source: Quantec Easydata
The contributions of the different provinces and districts to the total South African pear exports are explored
in the following subsection.
2.3 Provincial and district export values of South African pears
Figure 12 depicts the value of pear exports from each province of the Republic of South Africa for the
period 2005 to 2014. Pears worth over R2 billion were exported during 2014. This value was 11.4% higher
than the value of pear exports in 2013.
13
Figure 12: Value of pear exports by provinces, 2005 - 2014
Vlaue in Rands
2500000
2000000
1500000
1000000
500000
0
2005
2006
2007
2008
2009
2010
RSA
551136 461039 844610 916235 1163127 1183800
Western Cape 493842 409847 789157 864224 1084079 1070454
Eastern Cape 21339 16763 28129 35144 42349 37969
Northern Cape
0
0
0
0
13227
1139
Free State
0
0
0
0
0
0
KwaZulu-Natal 1850
951
5367
1548
9120
5258
North West
0
0
0
0
0
0
Gauteng
33934 33478 21243 15319 14337 65382
Mpumalanga
88
0
643
0
0
0
Limpopo
83
0
71
0
16
3597
2011
1241863
1140301
32278
775
0
1913
0
64777
0
1818
2012
1328574
1207909
33783
417
263
918
0
78340
52
6893
2013
1853254
1722377
50494
341
334
634
0
76824
444
1805
2014
2064583
1904846
54509
406
2874
30951
0
64111
356
6531
Years
Source: Quantec Easydata
It is evident from Figure 12 that the Western Cape has consistently been the dominant pear exporting
province of South Africa over the last ten years, exporting almost R2 billion worth of pears in 2014. It is
followed by the Gauteng at around R64 million and Eastern Cape at R54million during the same year.
Other provinces featured intermittently but usually registered minimal trade.
The following figures (Figures 13 - 21) show the value of pear exports from the various districts in the nine
provinces of South Africa, starting with the Western Cape in Figure 13.
It is clear from Figure 13 that exports of pears from the Western Cape are mainly from the City of Cape
Town, Cape Winelands, West Coast, and Overberg municipalities. High export values for all the leading
municipalities were recorded in 2014 with the exception of the Eden district that recorded its highest values
in 2010. The use of the Cape Town harbour as an exit point may have played a major role in the City of
Cape Town being a leader in the export of pears from the Western Cape (see Figure 13). Pear exports
from all the major districts in the Western Cape increased in 2014 when compared with 2013.
14
Value in Rands (R1 000)
Figure 13: Value of pears exports by Western Cape province, 2005 2014
2500000
2000000
1500000
1000000
500000
0
2005
Western Cape
493842
City of Cape Town 292680
West Coast
2285
Cape Winelands 141769
Overberg
56615
Eden
493
2006
409847
249190
2542
106578
51196
341
2007
789157
491592
12422
203282
81680
182
2008
864224
472948
12544
297461
81178
93
2009
2010
2011
2012
2013
2014
1084079 1070454 1140301 1207909 1722377 1904846
623433 591005 637923 664875 845828 905254
11539 10778 5771
3418
7625
7221
356906 399055 426457 469388 705053 815052
90730 66801 68971 68339 161992 174976
1471
2815
1178
1889
1880
2343
Years
Source: Quantec Easydata
Values of pear exports from the Gauteng province are shown in Figure 14. In Gauteng province, there have
been fluctuations in pear export values for the past ten years (see Figure 14). The leading role players
during the last three years have been the City of Tshwane, City of Johannesburg and
Ekurhulenimunicipalities. High export values of the leading municipalities were recorded in 2013 (for the
City of Johannesburg), 2012 (for City of Tshwane) and 2007 (for Ekurhuleni). The City of Tshwane was the
major exporter of pears from 2005 until 2006. Exports from the city have however been minimal 2007 and
2009 before rising again between 2010 and 2014.
15
Figure 14: Value of pears exports by Gauteng province, 2005 - 2014
90000
Value in Rands (R1 000)
80000
70000
60000
50000
40000
30000
20000
10000
0
2005
Gauteng
33934
Sedibeng
290
West Rand
0
Ekurhuleni
1328
City of Johannesburg 10622
City of Tshwane
21694
2006
33478
634
0
3825
7062
21957
2007
21243
327
298
5957
14660
0
2008
15319
390
0
512
13000
1418
2009
14337
0
668
1783
11678
208
2010
65382
0
0
2683
45033
17667
2011
64777
0
0
993
43454
20330
2012
78340
0
64
3957
46901
27418
2013
76824
0
218
1116
48194
27296
2014
64111
0
1336
1830
42299
18646
Years
Source: Quantec Easydata
Values of pear exports from the Kwazulu Natal province are presented in Figure 15. It is clear from Figure
15 that pear exports from KwaZulu Natal are mainly from the Umgungundlovu and Ethekwini municipalities.
High export values for the leading municipalities were recorded in 2014 (Umgungundlvu) and 2009
(Ethekwini). Exports from the Ethekwini have been fairly unstable during the past ten years. The
Umgungundlovu overtook Durban as the leading exporter of pears in 2009 in value terms before retreating
again in 2010, and overtook eThekwini again in 2014. The use of the Durban harbour as an exit point may
have played a major role in Ethekwini being a leader in the export of pears from Kwazulu Natal in the past
ten years (excluding 2009, 2012, 2013 and 2014). Exports by both Umgungunlovu and eThekwini districts
increased in 2014. while those of Ugu decreased.
16
Figure 15: Value of pear exports by Kwazulu Natal, 2005 - 2014
Value in Rands (R1 000)
35000
30000
25000
20000
15000
10000
5000
0
KwaZulu-Natal
Ugu
UMgungundlovu
Uthungulu
eThekwini
2005
1850
0
0
3
1847
2006
951
0
0
0
951
2007
5367
0
307
0
5060
2008
1548
0
0
0
1548
2009
9120
0
5064
0
4055
2010
5258
0
1361
0
3897
2011
1913
10
0
0
1903
2012
918
548
0
0
370
2013
634
327
0
0
308
2014
30951
105
29720
0
1125
Years
Source: Quantec Easydata
Figure 16 shows values of pear exports from the Eastern Cape province. The Nelson Mandela district
municipality is the leading exporter of pears in the Eastern Cape; exporting over R52 million worth of pears
in 2014 (see Figure 16). It was followed by the Cacadu district with exports worth over R2.1 million during
the same year. As can be seen from Figure 16 exports from the Nelson Mandela district have been
increasing since 2005, only taking a slight dip in 2006 before increasing substantially again between 2006
and 2009 and then taking another dip in 2010 and 2011, rising again between 2011 and 2014. On the other
hand exports from the Cacadu district have been declining since 2007 before rising in 2010, declining again
in 2011 and 2012 and rising between 2013 and 2014. The use of the Nelson Mandela Bay harbour as an
exit point may have played a major role in Nelson Mandela metropolitan municipality being the leader in
pear exports from the Eastern Cape.
17
Figure 16: Value of pear exports by Eastern Cape province, 2005 2014
Value in Rands (R1 000)
60000
50000
40000
30000
20000
10000
0
Eastern Cape
Cacadu
O.R.Tambo
Nelson Mandela
Buffalo City
2005
21339
2164
0
19171
4
2006
16763
475
0
16288
0
2007
28129
3672
0
24456
0
2008
35144
1772
0
33372
0
2009
42349
1214
289
40845
0
2010
37969
4014
0
33956
0
2011
32278
2030
0
30248
0
2012
33783
734
0
33048
0
2013
50494
2584
0
47911
0
2014
54509
2184
0
52324
0
Years
Source: Quantec Easydata
Values of pear exports from the Free State province are shown in Figure 17.
Figure 17: Value of pear exports by Free State province, 2005 - 2014
Value in Rands (R1 000)
3500
3000
2500
2000
1500
1000
500
0
Free State
Xhariep
Lejweleputswa
Thabo Mofutsanyane
Fezile Dabi
Mangaung
2005
0
0
0
0
0
0
2006
0
0
0
0
0
0
2007
0
0
0
0
0
0
2008
0
0
0
0
0
0
2009
0
0
0
0
0
0
2010
0
0
0
0
0
0
Years
Source: Quantec Easydata
18
2011
0
0
0
0
0
0
2012
263
250
14
0
0
0
2013
334
282
0
0
51
0
2014
2874
686
0
1508
256
425
It is clear from Figure 17 that all pear exports from Free State are mainly from Thabo Mofutsanyane,
Xhariep and Mangaung municipalities. High export value for the leading municipality was recorded in 2014.
Figure 18 depicts values of pear exports from the Northern Cape province.
Figure 18: Value of pear exports by Northen Cape province, 2005 to
2014
14000
Value in Rands (R1 000)
12000
10000
8000
6000
4000
2000
0
Northern Cape
Siyanda
2004
0
0
2005
0
0
2006
0
0
2007
0
0
2008
0
0
2009
13227
13227
2010
1139
1139
2011
775
775
2012
417
417
2013
341
341
2014
406
406
Years
Source: Quantec Easydata
Pear exports from the Northern Cape are mainly from Siyanda municipality. High export value for the
leading municipality was recorded in 2009. The municipality recorded pear exports to the value of R0.4
million in 2014.
Values of pear exports from the Limpopo province are shown in Figure 19. In 2014 almost all pear exports
recorded in the Limpopo province were from the Mopani district. 2010 marked the first year in which the
Vhembe district recorded pear exports after six years (see Figure 19). The Waterberg district also recorded
pear exports for the first time in 2014. During the period under review the Capricorn district recorded pear
exports only in 2009, 2010, 2011 and 2014.
19
Value in Rands (R1 0000)
Figure 19: Value of pear exports by Limpopo province, 2005 - 2014
8000
7000
6000
5000
4000
3000
2000
1000
0
Limpopo
Mopani
Vhembe
Capricorn
Waterberg
2005
83
83
0
0
0
2006
0
0
0
0
0
2007
71
71
0
0
0
2008
0
0
0
0
0
2009
16
0
0
16
0
2010
3597
3588
9
1
0
2011
1818
1796
20
2
0
2012
6893
6873
20
0
0
2013
1805
1765
40
0
0
2014
6531
6418
2
27
84
Years
Source: Quantec Easydata
Figure 20 shows the value of pear exports from the North West province.
Figure 20: Value of pear exports by North West province, 2005 2014
0.07
Value in Rands (R1 000)
0.06
0.05
0.04
0.03
0.02
0.01
0
North West
Bojanala
2005
0
0
2006
0
0
2007
0
0
2008
0
0
2009
0
0
2010
0.06
0.06
Years
Source: Quantec Easydata
20
2011
0
0
2012
0
0
2013
0
0
2014
0
0
Pear exports recorded in the North West during 2010 were all from the Bojanala district. (see Figure 20).
Values of pear exports from the Mpumalanga province are presented in Figure 21.
Figure 21: Value of pear exports by Mpumalanga province, 2005 2015
Value in Rands (R1 000)
700
600
500
400
300
200
100
0
Mpumalanga
Gert Sibande
Nkangala
Ehlanzeni
2005
88
0
88
0
2006
0
0
0
0
2007
643
643
0
0
2008
0
0
0
0
2009
0
0
0
0
2010
0
0
0
0
2011
0
0
0
0
2012
52
0
0
52
2013
444
0
0
444
2014
356
101
66
189
Years
Source: Quantec Easydata
It is clear from Figure 21 that the exports recorded by Mpumalanga province have been unstable during
the ten year period. Majority (53%) recorded pear exports by Mpumalanga in 2014 were from the Ehlanzeni
district. Gert Sibande is the second most exporter in Mpumalanga followed by Nkangala.
2.4 Share Analysis
Table 2 is an illustration of provincial shares towards national pear exports. The table shows that the
Western Cape is the leading exporter of pears in South Africa, accounting for 92.3% of the total South
African pear exports in 2014. It was followed by the Gauteng at 3.1%, Eastern Cape at 2.6%. As explained
earlier, this means that the leading export provinces derive their advantage from the fact that the registered
exporters are based in their provinces and they also have exit points for pear exports.
21
Table 2: Share of provincial pear exports to the total RSA pear exports (%)
Years
Province
RSA
Western Cape
Eastern Cape
Northern Cape
Free State
Kwazulu-Natal
North West
Gauteng
Mpumalanga
Limpopo
2005
2006
2007
100.0
89,6
3.9
0.0
0.0
0.3
00
6.2
0.0
0.0
100.0
88.9
3.6
0.
0.0
0.2
0.0
7.3
0.0
0.0
100.0
93.4
3.3
0.0
0.0
0.6
0.0
2.5
0.0
0.0
2008
2009
100.0
94.3
3.8
0.0
0.0
0.1
0.0
1.7
0.0
0.0
100.0
93.2
3.6
1.1
0.0
0.8
0.0
1.2
0.0
0.0
2010
100.0
90.4
3.2
0.1
0.0
0.4
0.0
5.5
0.0
0.3
2011
100.0
91.8
2.6
0.1
0.0
0.2
0.0
5.2
0.0
0.1
2012
100.0
90.9
2.7
0.0
0.0
0.1
0.0
5.9
0.0
0.5
2013
100.0
92.9
2.7
0.0
0.0
0.0
0.0
4.1
0.0
0.1
2014
100.0
92.3
2.6
0.0
0.1
1.5
0.0
3.1
0.0
0.3
Source: Calculated from Quantec Easydata
The accompanying tables (Tables 3 to 11) show shares of the various districts‟ pear exports to the various
provincial pear exports.
Table 3: Share of district pear exports to the total Western Cape provincial pear exports (%)
Years
District
Western Cape
City of Cape
Town
West Coast
Cape
Winelands
Overberg
Eden
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
59.3
60.8
62.3
54.9
57.5
55.2
55.9
55.0
49.1
47.5
0.5
0.6
1.6
1.5
1.1
1.0
0.5
0.3
0.4
0.4
28.7
26.0
25.8
34.4
32.9
37.3
37.4
38.9
40.9
42.8
11.5
0.1
12.5
0.1
10.4
0.0
9.4
0.0
8.4
0.1
6.2
0.3
6.0
0.1
5.7
0.2
9.4
0.1
9.2
0.1
Source: Calculated from Quantec Easydata
Table 3 presents the shares of district pear exports to the total Western Cape provincial pear exports for
the years 2005 to 2014. The leading pear export districts in the Western Cape in 2014 are the City of Cape
Town (47.5%) and the Cape Winelands (42.8%). Together, the two districts accounted for 90.3% of total
Western Cape provincial pear exports in 2014.
Table 4: Share of district pear exports to the total Eastern Cape provincial pear exports (%)
Years
District
Eastern
Cape
Cacadu
O.R.Tambo
Nelson
Mandela
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
10.1
0.0
2.8
0.0
13.1
0.0
5.0
0.0
2.9
0.7
10.6
0.0
6.3
0.0
2.2
0.0
5.1
0.0
4.0
0.0
89.8
97.2
86.9
95.0
96.4
89.4
93.7
97.8
94.9
96.0
Source: Calculated from Quantec Easydata
22
In the Eastern Cape, the leading district in pear exports is the Nelson Mandela district (see Table 4). The
district contributed 96% to total Eastern Cape provincial pear exports in 2014. The remainder was from the
Cacadu (4%) district.
Table 5: Share of district pear exports to the total Mpumalanga provincial pear exports (%)
Years
District
Mpumalanga
Gert Sibande
Nkangala
Ehlanzeni
2005
2006
100.0
0.0
100.0
0.0
2007
100.0
0.0
0.0
0.1
2008
100.0
100.0
0.0
0.0
100.0
0.0
0.0
0.0
2009
2010
2011
2012
2013
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100
0.0
0.0
0.0
0
0.0
0.0
0.0
100
0.0
0.0
0.0
2014
100
28.3
18.6
53.1
Source: Calculated from Quantec Easydata
The shares of district pear exports to the total Mpumalanga provincial pear exports are presented in Table
5. The Ehlanzeni district was the leading exporter of pear in 2014. The district was followed by Gert
Sibande (28.3%) and Nkangala (18.6%).
Table 6: Share of district pear exports to the total Free State provincial pear exports (%)
Years
District
Free State
Xhariep
Lejweleputswa
Thabo
Mofutsanyane
Fezile Dabi
Mangaung
2005
2006
2007
2008
2009
2010
0.0
0.0
0.0
201
2012
2013
2014
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
94.9
5.1
100.0
84.6
0.0
100.0
23.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
52.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
15.4
0.0
8.9
14.8
Source: Calculated from Quantec Easydata
The Free State province never recorded any exports of pears before 2012 (see Table 6). High pear export
were recorded by Thabo Mofutsanyane in 2014. Xhariep recorded second most pear export (23.9%) and
was followed by Mangaung (14.8%) and Fezile Dabi (8.9%).
Table 7: Share of district pear exports to the total Gauteng provincial pear exports (%)
Years
District
Gauteng
Sedibeng
West Rand
Ekurhuleni
City of
Johannesburg
City of Tshwane
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
100.0
0.9
0.0
3.9
100.0
1.9
0.0
11.4
100.0
1.5
1.4
28.0
100.0
2,5
0.0
3.3
100.0
0.0
4.7
12.4
100.0
0.0
0.0
4.1
100.0
0.0
0.0
1.5
100.0
0.0
0.0
5.1
100.0
0.0
0.3
1.5
100.0
0.0
2.1
2.9
31.1
21.1
69.0
84.9
81.5
68.9
67.1
59.9
62.7
66.0
63.9
65.6
0.0
9.3
1.5
27.0
31.4
35.0
35.5
29.1
Source: Calculated from Quantec Easydata
23
In 2014 the biggest contributor to total Gauteng provincial pear exports was the City of Johannesburg,
which contributed almost two-third (66%) (see Table 7). Another consistent contributor is the City of
Tshwane district (29.1% in 2014). The remainder was shared by the West Rand (2.1%) and Ekurhuleni
(2.9%).
Table 8: Share of district pear exports to the total North West provincial pear exports (%)
Years
District
North
West
Bojanala
2005
2006
2007
2008
2009
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2010
2011
2012
2013
2014
100.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
0.0
Source: Calculated from Quantec Easydata
The North West province never reported any exports of pears before 2010 (see Table 8). Recorded exports
in 2010 were all from Bojanala.North West province never recorded any exports between 2011 and 2014.
Table 9: Share of district pear exports to total Limpopo provincial pear exports (%)
Years
District
Limpopo
2005
Mopani
2006
2007
2008
2009
2010
2011
2012
2013
100.0
0.0
100.0
0.0
100.0
100.0
100.0
100.0
100.0
100.0
0.0
100.0
0.0
0.0
97.7
98.8
99.7
97.8
0.0
0.0
0.0
0.0
0.0
0.2
1.1
0.3
2.2
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
100.0
0.0
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
Vhembe
Capricorn
Waterberg
2014
100.0
98.3
0.0
0.4
1.3
Source: Calculated from Quantec Easydata
Table 9 presents the shares of district pear exports to the total Limpopo provincial pear exports for the
years 2005 to 2014. The most notable contributor is Mopani district and to lesser extent Waterberg and
Vhembe districts.
Table 10: Share of district pear exports to the total Northern Cape provincial pear exports (%)
Years
District
Northern Cape
Siyanda
2005
2006
2007
2008
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2009
2010
2011
2012
2013
2014
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Source: Calculated from Quantec Easydata
All recorded exports of pears in the Northern Cape province between 2009 and 2014 were from the
Siyanda district (see Table 10).
Table 11: Share of district pear exports to the total Kwazulu Natal provincial pear exports (%)
Years
District
Kwazulu-Natal
Ugu
2005
100.0
0.0
2006
100.0
0.0
2007
100.0
0.0
2008
2009
100.0
0.0
100.0
0.0
24
2010
100.0
0.0
2011
100.0
1.0
2012
100.0
59.7
2013
100.0
51.5
2014
100.0
0.3
Years
District
Umgungundlovu
eThekwini
2005
0.0
99.9
2006
2007
0.0
100.0
5.7
94.3
2008
2009
0.0
100.0
2010
55.5
44.5
25.9
74.1
2011
0.0
99.5
2012
0.0
40.3
2013
0.0
48.5
2014
96.0
3.6
Source: Calculated from Quantec Easydata
The shares of district pear exports to the total Kwazulu Natal provincial pear exports are presented in Table
11. In 2014, almost all (96%) pear exports from the Kwazulu Natal province were from the Umgungundlovu
municipality. The remaining was shared by EThekwini and Ugu districts.
2.5 Imports
Volumes of pears imported by South Africa from different regions of the world during the last ten years are
depicted in Figure 22. South Africa is a net exporter of pears. It is critical to note that imports of pears by
South Africa have been stable between 2008 2012, averaging 203 tons during that period. Before that
period (2008 to 2012), South Africa exported very minimal volumes of pears. In that fact, South African
imports of pears has increased during the period under review All South Africa‟s imports of pears in 2014
came from Asia. All 565 tons of pears imported by South Africa from the Asian continent in 2014 came from
China. In 2014 South Africa‟s imports of pears represented 0.00% of world imports and its ranking in the
world was 157.
Figure 22: Volume of pear imported by South Africa from regions of
the world, 2005 - 2014
300
Volume in Tons
250
200
150
100
50
0
World
Africa
Asia
2005
0
0
0
2006
15
0
15
2007
0
0
0
2008
188
0
181
2009
185
0
185
2010
195
6
185
Years
Source: Quantec Easydata
25
2011
201
0
200
2012
247
3
245
2013
65
1
64
2014
44
0
44
2.6 Processing
The volumes of pears available for processing in South Africa fluctuate yearly, depending on the crop size
and the percentages of exportable fruit. In 2013/14, the processing industry absorbed approximately 36%
(149 618 tons) of all pear production (411 991 tons). This figure represents direct purchases from growers
and quantities of pears purchased from the National Fresh Produce Markets (NFPMs). The volumes
processed and prices received during the last ten years are shown in Figure 23. As can be seen from
Figure 23, the volumes of pears processed have been inclining since 2011/12 while prices have also been
increasing. Volumes processed increased by 39% between 2010/11 and 2013/14 while prices dropped by
59% during the same period.
160000
1600
140000
1400
120000
1200
100000
1000
80000
800
60000
600
40000
400
20000
200
0
Average price in Rands (Rand/Ton)
Volume in Tons
Figure 23: Pears purchased for processing, 2004/05 - 2013/14
0
2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Years
Volume in Tons
Average price in Rand/Ton
Source: Statistics and Economic Analysis, DAFF
Pears are consumed fresh, canned, as juice or dried. The juice can also be used in jellies and jams, usually
in combination with other fruits or berries. Fermented pear juice is called perry. Pears will ripen faster if
placed next to bananas in a fruit bowl. They stay fresh for longer if kept in a fridge. Pears are the least
allergic of all fruits. Pear wood is one of the preferred materials in the manufacture of high quality woodwind
instruments and furniture. It is also used for wood carving, and as firewood to produce aromatic smoke for
smoking meat or tobacco.
3. GROWTH, VOLATILITY AND STABILITY ANALYSIS
Table 12 presents the results of growth and coefficient of variation estimations. They were calculated using
yearly statistics and covered the same ten-year period under review beginning in 2005 and ending in 2014.
26
The coefficient of variation is a measure of volatility or stability. When the coefficient of variation is less than
one, the variable in question is said to be relatively stable, meaning that there were minimal changes.
When the coefficient of variation is more than one, it is said to be volatile, meaning there were major
changes during the period under review.
Table 9: Pear industry growth rates & variation coefficients (2005 – 2014)
Category
Subcategory
Growth Rate (%)
Coefficient of Variation
Production
Gross Value (GV)
0.17
0.54
Volume
0.02
0.07
Sales
at GV/Price
0.08
0.26
NFPMs
Volume
-0.01
0.07
Export
Gross Value
0.09
0.31
Volume
0.03
0.15
Import
Gross Value
276.01
0.77
Volume
46.13
0.85
Source: Calculated from data from Statistics and Economic Analysis, DAFF and Quantec
As shown in Table 9 above, the pear industry experienced a positive growth rate from 2005 to 2014 in
terms of both gross values and volumes with the exception of Volumes sold at the NFPMs over the same
period. The sales at the NFPMs recorded a negative growth between the same period.
Table 9 also shows various levels of volatility at different levels of the pineapple industry‟s yearly figures
over the same period (2005 to 2014). Low volatility was indicated by the coefficients of variation that were
less than one (<1). All variables have values less than 1, which means that on a weighted variance scale,
they displayed minimal changes for pear during the ten years under review.
4. MARKET INTELIGENCE
4.1 Competitiveness of South African pear exports
Competitiveness is described as an industry‟s capacity to create superior value for its customers and
improved profits for the stakeholders in the value chain. The driving force in sustaining a competitive
position is productivity that is output efficiency in relation to specific inputs with regard to human, capital
and natural resources. In 2014, South African pear exports represented 6.7% of world exports and its
ranking on the world exports was number 7.
As depicted on Figure 24 below, South African pear exports are growing faster than the world imports in
Nigeria, Vietnam, United Arab Emirates and Saudi Arabian markets. South Africa‟s performance in those
markets can be regarded as gains in dynamic markets.
South African pear exports are growing while the world imports are declining in the Spain, France, India,
Portugal, Indonesia and Italian markets. South Africa‟s performance in those markets can be regarded as
gains in declining markets and should be viewed as achievement in adversity.
South African pear exports have declined faster than world imports in the Malaysia and Oman market.
South Africa‟s performance in this market can be regarded as loss in a declining market.
27
At the same time, South Africa‟s pear exports are declining while the world imports are growing in Angola,
Netherlands, Hong Kong, United Kingdom, Singapore, Canada and Russian markets. These markets are
dynamic and South Africa‟s performance in these markets should be regarded as an underachievement.
28
Figure 24: Growth in demand for the South African pears in 2014
Source: TradeMap, ITC
29
Figure 25 below illustrates prospects for market diversification by South African exporters of pears. The
Netherlands, United Kingdom, Russia and United Arab Emirates hold a bigger market share of South
African pear exports.
In terms of market size, Russia was the largest pear market in 2014 with just over $358 million ( 372 367
tons) worth of pear imports, or roughly 12.6% of the world pear market. Second was Germany with just
over $244 million (176 566 tons) worth of pear imports, or roughly 8.35% market share followed by the
Brazil with just over $200 million (208 379 tons) worth of pear imports, or roughly 7.0% market share and
Netherlands with just over $190 million (167 405 tons) worth of pear imports, or roughly 6.7% market share.
Whilst four countries dominate world pear imports, it is interesting to note that countries like Nigeria,
together with Hong Kong and Angola have experienced higher annual growth rates in terms of imports from
2010 – 2014 (See Figure 25). Nigeria experienced an annual growth rate of 76%. Second was Hong Kong
with 29% annual growth rate followed Angola at 13%. It is important to note that growth by all these
mentioned countries has been from a low base. These countries represent possible lucrative markets for
South African pear producers.
It is also important to note that pear imports from the world to countries such as Italy, Spain, Portugal,
France and Indonesia have declined from 2010 to 2014 and as a result these countries recorded negative
growth rates in pear imports.
30
Figure 25: South African pears’ prospects for market diversification in 2014
Source: TradeMap, ITC
31
4.2 South Africa vs. Southern hemisphere production
Figure 26 presents southern hemisphere production of pears for the period 2005 to 2014.
Figure 26: Southern hemisphere production of pears, 2005 - 2014
900000
800000
Volume in Tons
700000
600000
500000
400000
300000
200000
100000
0
Argentina
Australia
Chile
New Zealand
South Africa
2004
589429
138548
210000
40000
328538
2005
748727
151442
210000
32000
316142
2006
750000
139036
199000
33000
324023
2007
720000
134764
195000
35000
345737
2008
740000
130492
185000
32500
345087
2009
700000
120376
191000
31800
340088
2010
704242
95111
180000
30000
368495
2011
812633
123267
190000
27000
350527
2012
825115
119274
191000
30000
338584
2013
722324
109206
226118
28420
343203
2014
794000
107000
170000
10900
411991
Years
Source: FAOSTAT, WAPA estimates
It is clear that South Africa was the second largest ( 411 991 tons in 2014) producer of pears in the
southern hemisphere after Argentina with total production of 794 000 tons of pears during the same year.
South Africa was followed by Chile with 170 000 tons. The major markets for these countries are the
lucrative European and North American markets.
South Africa‟ main competitors from the southern hemisphere in the EU and the rest of European markets
for pear exports are Chile and Argentina. The main impact of the southern hemisphere pears into the
European market is that it drives prices down. Market coordination by the southern hemisphere can reduce
the pressure on price by controlling the supplies into the European markets. New Zealand, Brazil and
Australia produce primarily for local markets and exports very little. Both these countries pose no serious
threat in the European markets.
5. MARKET ACCESS
Barriers to trade can be divided into tariff barriers (including quotas, ad valorem tariffs, specific tariffs and
entry price systems) and non tariff barriers (sanitary and phytosanitary measures, labels, etc). The main
markets for fruit (including pear) employ various measures, both tariff and non tariff to protect the domestic
industries. Whilst many of the non tariff measures can be justified under the auspices of issues such as
health and standards, the tariff measures are increasingly under the scrutiny of the World Trade
32
Organization (WTO), and as such are gradually being phased out. Nevertheless, exporters need to be
aware of all the barriers that they may encounter when trying to get their produce onto foreign shelves.
5.1 Tariffs, quotas and the price entry system
Tariffs are either designed to earn government revenue from products being imported or to raise the price
of imports so as to render local produce more competitive and protect domestic industries.
Quotas can be used to protect domestic industries from excessive imports originating from areas with some
form of competitive advantage (which can therefore produce lower cost produce). Tariffs and quotas are
often combined, allowing the imports to enter at a certain tariff rate up to a specified quantity. Thereafter,
imports from that particular region will attract higher tariffs, or will not be allowed at all. This phenomenon is
referred to as tariff-rate quotas (TRQs).
The entry price system, which is used in many northern hemisphere markets, makes use of multiple tariff
rates during different periods when domestic producers are trying to sell their produce, and lower the tariffs
during their off-season. Alternatively, the tariff rate can be a function of a market price – if the produce
enters at a price which is too low (and therefore likely to be too competitive), it qualifies for a higher tariff
schedule.
Whilst tariff regulations can be prohibitive and result in inferior market access, it is often the non tariff
barriers that restrict countries like South from successfully entering the large developed markets. Many of
these barriers revolve around different types of standards, including sanitary and phytosanitary standards
(SPS), food health and safety issues, food labelling and packaging, organic produce certification, quality
assurance and other standards and grades. Table 12 presents tariffs applied by the top-ten export markets
(countries) to pears originating from South Africa. It is important to note that in 2014 five of the top ten
export markets for South African pears were members of the European Union. Because members of the
EU have the same tariff structure, only the EU will appear in Table 12 as opposed to the different member
states. They include the Netherlands, United Kingdom, Germany, France, and Italy.
Table 13: Tariffs applied by various markets to pears originating from South Africa
COUNTRY
European
Union
HS CODE
PRODUCT DESCRIPTION
0808301000
Fresh perry pears, in bulk, from 1
August to 31 December
080830901001
0808309090
Fresh pears (excl. perry pears in
bulk from 1 August to 31 December)
: Of the variety Nashi (Pyrus
pyrifolia), Ya (Pyrus bretscheideri).
If the declared price is higher than
or equal to 51 EUR/100 kg
Fresh pears (excl. perry pears in
bulk from 1 August to 31 December)
33
TRADE
REGIME
MFN duties
(Applied)
MFN duties
(Applied)
Preferential
tariff for
GSP
countries
MFN duties
(Applied)
APPLIED
TARIFFS
TOTAL AD
VALOREM
EQUIVALENT
TARIFF
0.00%
0.00%
2.50% or 2.50%
13.83
$/Ton
whichever
is the
greater
0.00%
2.50% or
13.83
0.00%
2.50%
COUNTRY
HS CODE
PRODUCT DESCRIPTION
TRADE
REGIME
: Other
Preferential
tariff for
South Africa
0808301000
Apples, pears and quinces, fresh:
Pears: No description at level 10
Russia
0808309000
United Arab
Emirates
08082010
08082020
Malaysia
08082000
Hong Kong
08082000
Indonesia
0808200000
Singapore
08083000
Canada
08083010
Apples, pears and quinces, fresh:
Pears: No description at level 10
Apples, pears and quinces, fresh:
Pears and quinces: Pears
Apples, pears and quinces, fresh:
Pears and quinces: Quinces
Fresh pears and quinces
Apples, pears and quinces, fresh:
Pears and quinces
Apples, pears and quinces, fresh:
Pears and quinces
Pears fresh (tne)
Fresh pears and quinces : Pears for
processing
34
APPLIED
TARIFFS
TOTAL AD
VALOREM
EQUIVALENT
TARIFF
$/Ton
whichever
is the
greater
0.00%
0.00%
MFN duties
(Applied)
8.30%
8.30%
Preferential
tariff for
GSP
countries
MFN duties
(Applied)
6.23%
6.23%
8.30%
8.30%
6.23%
6.23%
0.00%
0.00%
0.00%
0.00%
5.00%
5.00%
0.00%
0.00%
5.00%
5.00%
0.00%
0.00%
Preferential
tariff for
GSP
countries
MFN duties
(Applied)
MFN duties
(Applied)
MFN duties
(Applied)
MFN duties
(Applied)
MFN duties
(Applied)
MFN duties
(Applied)
MFN duties
(Applied)
8.00% or
17.53
$/Ton
whichever 8.00%
is the
greater
COUNTRY
HS CODE
PRODUCT DESCRIPTION
08083091
Fresh pears and quinces : Other
pears : Imported during such period
specified by order of the Minister of
Public Safety and Emergency
Preparedness or the President of
the Canada Border Services
Agency, not exceeding 24 weeks in
any 12 month period ending 31st
March
08083099
India
08082000
Angola
08082000
Fresh pears and quinces : Other
pears : Other
Apples, pears and quinces, fresh:
pears and quinces
Pêras e marmelos, frescos
TOTAL AD
VALOREM
EQUIVALENT
TARIFF
TRADE
REGIME
APPLIED
TARIFFS
MFN duties
(Applied)
10.50%
or 23.24
$/Ton
10.50%
whichever
is the
greater
MFN duties
(Applied)
MFN duties
(Applied)
MFN duties
(Applied)
0.00%
0.00%
30.00%
30.00%
50.00%
50.00%
Source: Market Access Map, ITC
Tariffs imposed by the European Union on pears originating from South Africa vary depending on the
month during which pears are imported, ensuring that tariffs are higher during the European pear season
and lower when European pear stocks are low. Asian countries such as the United Arab Emirates,
Singapore as well as Hong Kong do not impose any tariff on pears originating from South Africa. These
countries present great potential for South African exporters given their ever-increasing disposable
incomes, populations, as well as their changing consumption and lifestyle patterns. Russia imposes a
8.30% tariff on pears originating from South Africa while Malaysia and Indonesia impose a 5% tariff on
South African pears. In the Canadian market, South African pears face tariffs of up to 10.5% while India
and Angola impose tariffs of 30% and 50% respectively.
In reality, the tariffs are likely to be far lower for South Africa when considering the preferential agreements,
but at the same time, most tariff structures are particularly complex, with quotas, seasonal tariffs and
specific tariffs (an amount per unit than rather than a percentage of value) all contributing to many different
tariff lines and often higher duties payable than one might have anticipated initially. One must also bear in
mind that most tariffs are designated to protect domestic industries, and as such are likely to discriminate
against those attempting to compete with the domestic producers of that country.
5.2 European Union (EU)
As can be observed from Table 12 above the EU has a seasonal tariff structure with tariffs at their peak
during the European peak harvesting seasons (the price entry system). The Union also has quotas and
specific tariffs and various policies that allow, amongst other things, government organizations to purchase
produce should supply rise too quickly (and thereby maintain prices), and then release this excess back
onto the market as and when supply drops again. The immediate implication of these policies for South
Africa is that an opportunity exists to supply pears to the European market in the off season periods, as the
35
produce will not compete directly with the European producers and thus would not be liable to a whole
array of higher tariffs and other protective mechanisms.
There are other non-tariff barriers, including the phytosanitary and food health regulations laid down by the
EU legislation, marketing standards and certificates of conformity, and the ever changing demand patterns
of the EU consumers.
5.2.1 Tariff barriers
The EU applies a system known as entry price system. With this system, the EU establishes an „entry price‟
at which produce may enter the EU market, which is not only based on the market price for the current year
(demand and supply) and for previous years, but also on the prices of the domestic producers (prices they
need to maintain profitability). It is calculated by the regulatory authorities so that it can be used in
combination with tariffs and quotas to aid EU‟s attempts at protecting its agricultural system. The entry price
is the minimum price at which produce may enter the market. If the price of the produce is lower than its
calculated price, it is liable to have duties imposed upon it over and above any duties/quotas it might
originally attract. Agricultural duties are applied as follows:




When the value of the imported party is between 92% and 94% of the entry price, 8% of the entry
price will be added to the normal customs duty.
When the value of the imported party is between 94% and 96% of the entry price, 6% of the entry
price will be added to the normal customs duty.
When the value of the imported party is between 96% and 98% of the entry price, 4% of the entry
price will be added to the normal customs duty.
When the value of the imported party is between 98% and 100% of the entry price, 2% of the entry
price will be added to the normal customs duty.
There are tariffs applicable over and above the entry price tariffs, depending on the produce, where it
originates from and whether that country has any preferential trading agreements with the EU.
5.2.2 Non tariff barriers
Non tariff barriers can be divided into those that are mandatory and laid out in the EU Commission‟s
legislature and those that are a result of consumers, retailers, importers and other distributors‟ preferences.
5.2.2.1 Legal requirements
i) Product legislation: quality and marketing
There are a number of pieces of EU legislation that govern the quality of produce that may be imported,
marketed and sold within the EU. They are as follows:
General Food Law which covers matters in procedures of food safety and hygiene (micro-biological and
chemical), including provisions on the traceability of food (for example, Hazard Analysis and Critical Points,
or HACCP), and it is laid out under regulation EC 178/2002.
36
EU Marketing Standards which govern the quality and labelling of fruit are laid out in the Common
Agricultural Policy (CAP) framework under regulation EC 2200/96. These regulations include diameter,
weight and class specifications, and any produce that does not comply with these standards will not be sold
on the EU markets.
Certificate of Conformity must be obtained by anyone wishing to export and sell fruits in the EU, if that
fruit falls under the jurisdiction of the EU marketing standards.
Certificate of Industrial Use must be obtained if the fruit is to be used in further processing.
Maximum Residue Limits (MRL) of various pesticides allowed.
ii) Product legislation: phytosanitary regulations
The international standard for phytosanitary measures was set up by the International Plant Protection
Committee (IPPC) to protect against spreading of diseases or insects through the importation of certain
agricultural goods. The EU has its own particular rules formalized under EC 2002/89, which attempts to
prevent contact of EU of crops with harmful organisms from elsewhere in the world.
The crux of the directive is that it authorizes the Plant Protection Services to inspect large number of fruit
products upon arrival in the EU This inspection consist of physical examination of a consignment deemed
to have a level of phytosanitary risk, identification of any harmful organisms and certification of the validity
of any phytosanitary certificate covering the consignment. If the consignment does not comply with the
requirements, it may not enter the EU although certain organisms can be fumigated at the expense of the
exporter.
iii) Product legislation: packaging
The EU Commission lays down rules for materials that come into contact with food and which may
endanger people‟s health or bring about an unacceptable change in the composition of the foodstuffs. The
framework legislation for this is EC 1935/2004. Recycling packaging materials are also emphasized under
94/62/EC, whereby member states are required to recycle between 50% and 65% of packaging waste. If
exporters do not ship produce in packaging which is reusable, they may be liable for the costs incurred by
the importing companies. Wood packaging is subject to phytosanitary controls and may need to undergo
heat treatment, fumigation, etc.
5.2.2.2 Non-legal requirements
To access the market, importers must not only comply with legal requirements set out above, but must also
with market requirements and demands. For the most part, these revolve around quality and the perception
of European consumers about environmental, social, health and safety aspects of both the products and
the production techniques. Whilst supplying fruit that complies with these issues may not be mandatory in
the legal sense, they are becoming increasingly important in Europe and cannot be ignored by existing or
potential exporters.
i) Social accountability is becoming important in the industry, not only amongst consumers, but also for
retail outlets and wholesalers. The Social Accountability 8000 (SA 8000) certification is a management
37
system based on International Labour Organization (ILO) conventions, and deals with issues such as child
labour, health and safety, and freedom of association, and requires an on-site audit to be performed
annually. The certificate is seen as necessary tool for accessing any European market successfully.
ii) Environmental issues are becoming increasingly important with European consumers. Consumer
movements are lobbying against purchasing non-environmentally friendly or non-sustainable produce. To
this end, both governments and private partners have created standards (such as ISO 14001 and
EUREGAP) and labels to ensure that produce adhere to particular specifications.
Although eco-labels (for example, the EU Eco-label, the Netherlands Milieukeur, the German Blue Angel
and the Scandinavian White Swan) are voluntary, they can afford an exporter a marketing edge, as
consumers wishing to purchase environmentally sound produce demand products that are easily
recognizable.
Another important emerging label is Fairtrade, and includes those labels offered by Max Haavelaar
Foundation, TransFair International and the FLO (Fairtrade Labelling Organization). Recently a „universal‟
logo was adopted based on international fair trade standards developed by FLO, which covers amongst
other things, minimum quality and price, various processing requirements, compensation of small farmers
that covers sustainable production and living standards, and contracts that allow for long term planning and
development.
5.2.2.3 Consumer health and safety requirements
Increasing consumer conscience about health and safety issues has prompted a number of safety
initiatives in Europe, such as EUREPGAP on good agricultural practices (GAP) by the main European
retailers, the international management system of HACCP, which is independently certified and required by
legislation for European producers as well as food imported into Europe (EC 852/2004), and the ISO 9000
management standards system (for producers and working methods) which is certified by the International
Standards Organization (ISO).
5.3 United States of America (USA)
5.3.1 Tariff barriers
South African exporters have completely free access to the USA markets under the Generalized System of
Preference (GSP), the GSP for LCDs (Least Developed Countries) or the African Growth and Opportunity
Act (AGOA). South African exporters must always compare with what Chile (the main supplier of fruit to the
USA and South Africa‟s potential rival) must pay in terms of tariff duties when exporting fruit to the USA.
Chile‟s access to the USA fruit market is considered to be highly preferential under its own Preferential
Trade Agreement (PTA).
5.3.2 Non tariff barriers
The USA‟s phytosanitary regulation is conducted by Animal and Plant Health Inspection Service (APHIS),
which is divided into nine sub-sections. Plant Protection and Quarantine (PPQ) and Veterinary Services
(VS) are responsible for issuing permits for commodities and determining whether a commodity can be
38
imported. The Policy and Program Development (PPD) division works with both these divisions in
determining long term plans and procedures.
Some products can get pre-clearance from international Services (IS) personnel stationed in the country of
origin, either at exporting terminals of site inspections. The PPQ‟s main focus is to prevent the spread of
diseases and pests into the USA‟s agriculture resources, and it has personnel stationed at all airports,
seaports and border stations that check imported cargo and oversee the quarantine process. Exporters or
importers must make a request to export/import a commodity, provide as much information as possible on
the product, its region of origin and its status that is whether there are restrictions or regulations governing
that particular product from that particular region before a permit is issued, along with the conditions of
importation (disinfestations treatment) or mitigation measures. Denials can be challenged and governments
and companies can request a change in the status of a prohibited commodity (an investigation must be
performed by the PPQ scientific team), as long as sufficient conditions have changed or a risk assessment
has not been conducted within the last 10 years.
Most approved commodities can enter with inspection alone, but some may have to undergo mitigating
measures including post-harvest treatments (hot/cold temperature treatments, irradiation or fumigation,
depending on the requirements and which particular treatment is least harmful). The establishment of
specifically and maintained pest-free areas in a country (which obviously requires extensive co-operation
between the country‟s plant health services and APHIS IS division) or systems approaches (field surveys,
random inspections or various on site treatments.
In addition to phytosanitary regulations, the USDA Food Safety Inspection Services (FSIS) regulates
sanitary practices in the packing of food products, while the Food and Drug Administration (FDA), which is
part of the US Department of Health, regulates packaging and labelling. The HACCP protocol is used
extensively. The USDA quality standards for fruits and vegetables provide basis for domestic and
international trade and promote efficiency in marketing and procurement.
6. DISTRIBUTION CHANNELS
There are roughly three distinct sales channels for exporting fruits. One can sell directly to an importer with
or without the assistance of an agent (usually larger, well established commercial operations). One can
supply fruits combined, which will then contract out importers/marketers and try to take advantage of
economies of scale and increased bargaining power. At the same time combined fruits might also supply
large retail chains. One can also be a member of a private or cooperative export organization which will find
agents or importers and market the produce collectively. Similar to combined fruits, an export organization
can either supply wholesale market or retail chains, depending on particular circumstances. Export
organizations will wash, sort and package the produce.
They will also market the goods under their own name or on behalf of the member, which includes taking
care of labelling, bar-coding, etc. Most of the time, export organizations will enter into collective agreements
with freight forwarders, negotiating better prices and services (more regular transport, lower peak season
prices, etc). Some countries have institutions that handle all the produce (membership compulsory) and sell
only to a restricted number of selected importers.
Agents will establish contacts between producers/export organizations and buyers in the importing country,
and will usually take between 2% and 3% commission. In contrast, an importer will buy and sell his/her own
39
capacity, assuming the full risk (unless on consignment). They will also be responsible for clearing the
produce through customs, packaging and assuring label/quality compliance and distribution of the produce.
Their margins lie between 5% and 10%. The contract importers of fruit combines market and distribute the
produce of the combines, clear it through customs and in some cases treat and package it.
Only few exporters have long term contracts with wholesale grocers who deliver directly to retail shops, but
with the increasing importance of standards (GlobalGap, etc) and the year round availability of fruit, the
planning of long term contractual relationship is expected to increase.
7. LOGISTICS
7.1 Mode of transport
The transport of fruits falls into two categories namely ocean cargo and air cargo. Ocean cargo takes much
longer to reach the desired location but costing considerably less. The choice of transportation method
depends, for most parts on the fragility of the produce and how long it can remain relatively fresh. With the
advent of technology and container improvements, the feasibility, cost and attractiveness of sea transport
have improved considerably. With the increased exports by South Africa, the number and the regularity of
maritime routes have increased. These economies of scale could benefit South Africa if more producers
were to become exporters and take advantage of the various ports which have special capabilities in
handling fruit produce (for example Durban‟s new fruit terminal).
7.2 Cold chain management
Cold chain management is crucial when handling perishable products, from the initial packing houses to the
refrigerated container trucks that transport the produce to the shipping terminals, through to the storage
facilities at these terminals, onto actual shipping vessels and containers, and finally on to the importers and
distributors that must clear the produce and transport it to the markets/retail outlets. For every 10 Degree
Celsius increase above the recommended temperature, the rate of respiration and ripening of produce can
increase twice or even thrice. Related to this are increasing important traceability standards which require
an efficient controlled supply chain and internationally accepted business standards.
7.3 Packaging
Packaging can also play an important role in ensuring safe and efficient transport of a product and
conforming to handling requirements, uniformity recyclable material specifications, phytosanitary
requirements, proper storage needs and even attractiveness for marketing purposes. The business panel
of any carton (including printed carton labels) should comply with the requirements as established by the
EU or any other regulations that are specified by a target market. Producers are advised to present their
designs to the Perishable Products Export Control Board (PPECB) before they can order any cartons from
a manufacturer. The following is normally required:
 Class I or II
 Fruit type
 Carton depth
 Country of Origin: “Produce of South Africa”
 Complete address of exporter or producer
40





Name of variety
Content of carton: “14 x punnets or bags”
PUC or PHC code: Registered producer – or Pack House Code with DAFF
Date code
Food safety accreditation number: Global Gap, Nature‟s Choice registration number, etc
8. ORGANIZATIONAL ANALYSIS
8.1 Producer and associated organizations
Grower participation and control of their interests in the industry are structured by means of fruit type
producer associations (Section 21 companies), as illustrated on Figure 27. The industry consists of Hortgro
Services as its mouthpiece. Hortgro Services is responsible for administrative services and financial
administration, as well as operational industry services such as transformation and training, information,
communication and social programmes.
Hortgro Services comprises of its members, affiliated members and service entities. The members are the
South African Apple and Pears Producers Association (SAAPPA), South African Stone Fruit Producers
Association (SASPA), Dried Fruit Technical Services (DFTS), Protea Producers of South Africa (PPSA),
South African Cherry Growers‟ Association (SACGA), and the South African Olive Industry Association.
The affiliated members are Rooibos Tea Producers Association, Pomegranate Producers Association,
Cape Flora, South African Honeybush Tea Association (SAHTA), South African Bee Industry Organisation,
South African Berry Producers Association.
The service entities are Fruitgro Science (DFPT Research), South African Plant Improvement Organisation
(SAPO) Trust, Cultivar development Company (CULDEVCO), Sterile Insect Technique (SIT) Africa,
Entomon Technologies and the SA Fruit Journal.
41
Figure 27: Structure of the producer interest in the deciduous fruit industry
HORTGRO SA
HortgroSA
National
communication
platform
No capacity
PA’s affiliated
& services /
functional entities
associated
S
A
A
P
P
A
S
A
S
P
A
D
F
T
S
C
F
P
A
S
A
O
L
I
V
E
P
P
S
A
S
A
C
H
E
R
R
Y
H
O
N
E
Y
B
U
S
H
R
O
O
I
B
O
S
?
?
S
A
T
C
O
U
N
C
I
L
SAPO
TRUST
Each with own deed,
constitution, board,
members, priorities
& funds
Mouthpiece for own
affairs, manage own
funding
Own or shared /
contracted capacity
SPV
CULDEVCO
HORTGRO
SERVICES
(DFPT)
SIT AFRICA
SIT AFRICA
DFPT RESEARCH
SA FRUIT
SA FRUIT
JOURNAL
JOURNAL
CGA/FPEF
SUBTROP
Source: Hortgro
42
FRUIT SA
FRUIT SA
The main association responsible for the pear industry is the South African Apple and Pear Producers
Association (SAAPPA). It is a Section 21 company and its objectives are as follows:
 To rationalize and promote the production and marketing of apples and pears, apple and pear
products.
 To support and assist the development of the Association‟s decision-making systems and
structures.
 To encourage and pursue constructive dialogue and mutual cooperation with government and
other role players in order to promote the interest of the Association and its members.
 To foster mutual trust and long term relationships among role players and stakeholders.
 To establish and promote a reciprocal information system and promote the maintenance of
responsible and sustainable production and marketing practices.
8.2 Strengths, Weaknesses, Opportunities and Threat analysis
Some of the strengths, weaknesses, threats and opportunities of the pear production sector in South Africa
are the following:
Strengths






Weaknesses
The industry‟s export operations and leading
players who account for approximately 80% of
the overall exports are well established.
An efficient export infrastructure exists and
market access has been improved.
The South African pear industry is known for
excellent overall quality for fruit (strong
reputation in major international markets).
Sound communication mechanisms to majority
of industrial participants.
High level of investment in current technology
within pack houses and cold chain facilities.
Industry has all traceability systems in place, as
required by accreditation protocols.










43
Production is largely dependent on climatic
conditions which can only be partially
manipulated by man through irrigation.
Deteriorating research infrastructure and
capacity may limit new technology development
in the future.
Saturation of traditional export markets.
Reliance on the UK and EU as main export
market.
Relatively high input and capital costs.
An element of fragmentation in the industry.
Lengthy supply chain beyond the pack house.
Lack of industry control on efficiency and
productivity in supply chain beyond farm gate
and pack house door.
Poor skills and knowledge of the new entrants.
Delays due to degradation of the supporting
infrastructure within the supply chain (handling
facilities at ports, roads and energy supply).
Threats

Opportunities
Increased competition from the Southern
Hemisphere counterparts like Chile, Brazil,
Argentina and Australia.
Oversupply of fruit into established export
markets.
Availability and cost of irrigation water.
Impact of climate change especially in the
Western Cape.
Inflation rate with regard to cost of labour and
farming and also packing prerequisites.
Currency variability.








Market access initiatives to the Middle East,
Asia (India, Indonesia) and China.
Increasing demand for fresh apples in Africa.
Potential for increased local market
consumption.
8.3 Strategic challenges
8.3.1 Labour markets
The critical need for labour at harvest time offers seasonal work to unemployed persons in the immediate
vicinity of plantations. In most countries, workers migrate from one region to another as the harvest season
progresses from early to late. However, in the local scenario, labourers lack mobility as well as skills to find
work outside crop harvesting.
A major challenge in terms of labour is the lack of skilled labour. At the same time, farm wage levels do not
attract skilled or qualified people to undertake menial and hard work. Smaller producers, who pay
comparatively lower wages, are more exposed than the larger producers to the threat of labour shortages.
8.3.2 Infrastructure
Some of the infrastructural challenges are as follows:






Lack of storage capacity at certain times of the year, when pears and other fruits are being
harvested (mid January until end of February).
Hygiene and micro-bacterial quality of water available for use in pack houses and domestic
purposes on farms.
Poor or no communication between the agricultural sector and service providers in terms of
planning and future expansion on issues such as energy and transport.
Transport from the pack house to the market – road, ship or rail.
Logistical systems which are not applied at full efficiency.
Inefficient handling operations at South African ports, giving rise to costly delays and breaks in
the cold chain.
8.3.3 Other challenges
Producers are being confronted with more regulations to control the production from farm to fork. These
include regulating soil, air, water, chemical, labelling and safety. On the retailing side pressure mounts to
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introduce measures for increased traceability of products. The consumer wants a safe product produced
with socially acceptable and environmentally friendly production methods. Combined with this many
consumers are up in arms about GMO‟s.
Competition for scarce natural resources (land and water) is putting continued pressure on good farmland
that can otherwise be used for agricultural purposes.
There is a threat of climate change particularly in the Western Cape Province. Production of pears and
other fruits could be adversely affected by the warming of the winter season due to rising average
temperatures and subsequent loss in chilling hours. Lack of winter chilling gives rise to delayed foliation
and the problem of small fruit of poor quality. Increased average maximum temperatures in January and
February may result in poor colour development. The risk of sunburn is also increased.
8.4 Empowerment issues and transformation in the sector
According to Hortgro Services, transformation in the deciduous fruit industry has four focus areas. These
are economic development, the Deciduous Fruit Development Chamber (DFDC), networking and agrivillages.
With regards to economic development, Hortgro Services serves as an implementation agent of CASP
grants for the Western Cape Department of Agriculture. This provides an opportunity for Hortgro to provide
matching funds for the implementation of targeted transformation projects in the province. The main focal
point of economic development is the tree project. The tree project aims to increase production or footprint
for Black Economic Empowerment (BEE) farmers.
To overcome transformation challenges and encourage it, the Deciduous Fruit Development Chamber
(DFDC) was established as a national support structure for emerging deciduous fruit farmers. The DFDC
provides space for incubator interactions that guide the business and technical assistance to emerging fruit
farmers. The DFDC aims to fulfil a dynamic capacity building and advocacy role and to exert pressure in
order to mobilise resources from various quarters, including government and the donor community.
Networking entails the building of relationships and networks in order to enhance the procurement of funds
and other resources to help with the transformation process. This includes building working relations with
all commercial banks and other DFIs and parastatals such as the Land Bank, Industrial Development
Corporation (IDC), the Agricultural Research Council (ARC), and other industry stakeholders.
Agri-villages focus specifically on the provision of housing for farm workers and their families. Hortgro
Services has committed itself to participating in organised agricultural initiatives to explore the following
options as possible solutions to farm worker housing:
 On-farm housing without ownership rights.
 Off-farm housing without ownership, e.g. renting.
 Off-farm housing with ownership.
9. PEAR SUPPLY VALUE CHAIN
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The supply value chain is a complex linkage of various production and operational role-players (see Figure
28). Key stakeholders include producer organisations, organised labour, NOGs, financial institutions,
government, exporters and other traders. The following discussion focuses on the main segments of the
pear value chain.
9.1 Suppliers of inputs and farming requisites
Fruit farming is a large user of specialised inputs and sophisticated agricultural chemicals. Input suppliers
ensure that all inputs needed by farmers for successful production, including farm equipment, pesticides,
insecticides and others, are always available at reasonable prices so as to ensure a competitive fruit
industry in South Africa.
9.2 Producers
The core business of producers is to produce a high quality crop within “Good Agricultural Practice”
protocols. Consistency, reliability of supply and producing varieties as demanded by the markets at
affordable prices are also important facets of the producer‟s responsibility and business activities.
9.3 Fresh produce markets
FPMs are the dominant player and form of wholesaling in the South African pear and fresh fruit and
vegetable (FFV) sector. However other wholesale forms do exist including independent wholesalers,
contract buyers, supermarkets, wholesaling subsidiaries, as well as farmer sales direct to retailers and to
consumers.
Being the largest wholesalers, the FPMs have emerged as the FFV price-setters or, as nicknamed, the
“fresh produce stock exchange”. The prices at the FPMs are arrived at through a bargaining process
mediated by market agents who have a dual objective to collect the best prices (and hence commission) for
sales while ensuring that the highly perishable stocks are cleared. These prices are then used as reference
prices even in private transactions outside the FPMs.
9.4 Retailers
South African pear retailers exist in both the formal and informal sectors. In the former this includes formally
registered retail chains, supermarkets and neighbourhood stores. The latter covers tuck shops (sphaza),
and hawkers. In this environments pears sales are at predetermined prices and are typically individually or
in small packages.
9.5 Processors
As explained earlier, the processing of pears consists of canning, drying and juice manufacturing There is
also a set of further processors not captured in the group above. These entities use pears (and pear
products) in food preparations. This includes caterers, hospitality and other institutions such as corporates,
government institutions like hospitals, prisons, etc.
9.6 Cold storage operators and transporters
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Cold storage operators are responsible for receiving, handling, cooling the pears to the required
temperature and for ensuring that the correct fruit is loaded out according to the exporter‟s specifications
into a truck or container that has been approved or registered by Perishable Produce Export Control Board
(PPECB). A flat bed truck or other non-approved vehicle may be used in journeys shorter than two hours in
total.
Transporters perform a key link in the fresh fruit supply chain by facilitating the physical transfer of the
products between parties such as the producer, cold store and terminal operator. Transporters are
responsible for maintaining the cold chain during transit.
9.7 Exporters
The core business of exporters is to market and sell the fruit of primary producers at the best market price
that they are able to negotiate. In order to realize this, the exporter needs to communicate with many of the
role players in the logistics chain (cold stores, transporters, shipping lines, port terminals, clearing and
forwarding agents, PPECB, regional producers associations and special market inspectors, etc). It is the
exporters‟ responsibility to manage the cold chain, handle the fruit in an acceptable manner and, they are
accountable for the quality of fruit that reaches the destination market.
The main organisation that handles the export of fruits in South Africa is the Fresh Produce Exporters‟
Forum (FPEF). The FPEF was registered in 1998 as a non-profit organisation and its membership is
voluntary and open to all companies that export fresh fruit from South Africa. The FPEF‟s mission is to
create, within free market principles and a deregulated environment, a prosperous but disciplined fruit
export sector. It was established mainly to provide leadership and services to its members and the
international buying community. The forum sees itself as the international community‟s gateway to
providing South Africa‟s finest quality produce from highly reputable South African exporters.
9.8 PPECB
In terms of the PPECB Act (Act 9 of 1983) the PPECB is responsible for the “control of perishable products
intended for export from the Republic of South Africa”. This mainly involves the control of the cold chain
(including the shipping process). PPECB also acts as a government “assignee” in terms of the APS
(Agricultural Products Standards) Act (Act 119 of 1990) and is responsible for the “control over sale and
export of agricultural and related products”. PPECB controls (and certifies) that the quality standards of
these products are met. The National Department of Agriculture, Forestry and Fisheries (DAFF) issues the
phytosanitary certificates.
All PPECB and other inspection regulations, protocols or requirements must be met and adhered to. The
Information and Communication Procedure (ICP) must therefore be seen in conjunction with the PPECB
Act and its regulations, the APS Act, as well as those temperature and other specialized handling protocols
and procedures as established by PPECB in conjunction with the industry. As more emphasis is placed on
food safety and customers are demanding higher standards of quality, PPECB and other inspection bodies
play an increasingly important role in the export of fresh produce from South Africa. PPECB may make the
following information available to exporters and producers on request:

Packed volumes
 Inspected and approved for export
47



 Inspected and rejected for export
Product quality
 Reasons for rejection
Shipped volumes
 This information is available on a product and destination region level
Cold chain information
 Vessel carrying instructions (temperature letter, vessel temperature log, statements of
facts, deviations, etc.
The information outlined above is available in varying degrees of detail.
9.9 Terminal and port operators
Terminal operators must inform exporters, PPECB and other relevant parties in the supply chain such as
transporters, producer associations, producers and cold stores about port related delays such as labour
strikes, wind delays, plug-in congestion and other traffic congestion in the port that will impact on the flow of
fresh produce into and out of the harbour. The South African Port Operations (SAPO) container terminal
reports to shipping lines.
48
Figure 28: The deciduous fruit and table grape supply value chain
Source: OABS
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10. ACKNOWLEDGEMENTS
The following industries/organizations are acknowledged.
10.1 South African Apple and Pear Producers Association
P. O. Box 163
Paarl
7622
Tel: (021) 870 2900
Fax: (021)870 2915
www.hortgro.co.za
10.2 National Department of Agriculture, Forestry and Fisheries
Directorate: Statistics and Economic Services
Private X 246
Pretoria
0001
Tel (012) 319 8454
Fax (012) 319 8031
www.daff.gov.za
10.3 Optimal Agricultural Business Systems (OABS)
P. O. Box 163
Paarl
7622
Tel: (021) 890 2953
Fax: (021) 890 2915
www.oabs.co.za
10.4 Trade and Industrial Policy Strategies (TIPS)
P. O. Box 11214
Hatfield
0028
Tel (012) 431 7900
Fax (012) 431 7910
www.tips.org.za
10.5 National Agricultural Marketing Council (NAMC)
Private Bag X 935
Pretoria
0001
Tel (012) 341 1115
Fax: (086) 626 4769
www.namc.co.za
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Disclaimer: Disclaimer: This document and its contents have been compiled by the Department of Agriculture, Forestry and
Fisheries for the purpose of detailing pear industry. Anyone who uses this information does so at his/her own risk. The views
expressed in this document are those of the Department of Agriculture, Forestry and Fisheries with regard to agricultural
industry, unless otherwise stated. The Department of Agriculture, Forestry and Fisheries therefore, accepts no liability that can
be incurred resulting from the use of this information.
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